Ucal Fuel attracts value buying

The Ucal Fuel stock, which closed at Rs 118.45 on the NSE, is said to be attracting higher volumes these days as it is seen as a value proposition. The stock gained over 20 per cent on month-on-month basis. The management recently gave a guidance of CAGR of 20 per cent in sales for the next five years. However, profit margins are estimated to be under pressure due to rising raw material and interest costs.

At the current market price, the stock is quoting at about 13x its 2006 stand-alone earnings.

On Tuesday, about 33,000 shares were traded on the NSE. The 52-week high for the stock is Rs 289.75.

Nilanjan Dey

(This article was published in the Business Line print edition dated August 23, 2006)

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